Saving money is something almost everyone struggles with. In fact, a survey was conducted that found that 69% of people had less than one thousand dollars in savings. That's scary when you think about everything you might need to have a bit of extra money for. The key to more savings, is to open up multiple savings accounts.
Why One Account Is Not Enough
Most people have only one savings account. The biggest problem with that is that there are lots of things to save for. Be it a new pair of shoes, a retirement fund, or anything in-between. Having a list of things to save for makes it nearly impossible to save for everything all together, as you're bound to dip into money meant for other things.
Accounts For Goals
Chances are, you have something you want to buy, in the short term or long term. It's a great idea to open up multiple savings accounts with a goal in mind. For example, say you want to go on a holiday with your family every year at a specific time. You can open a savings account to pay for the trip, and gradually pay money into it. If the account you opened pays interest, then that's even better, as it'll give you a bit more money. This can be applied to all your goals, be it a new wardrobe or a new house. Remember though, that for savings accounts, it's usually better to get a less liquid account (fewer withdrawals allowed per month) as they tend to have higher interest rates. Best of all, once you reach your goal amount, you can leave it there to make you some extra money.
Saving For An Emergency
Hope for the best, but planning for the worst is some of the best advice you can follow. Things can happen in life that cost a lot of money to fix. It can be as small as getting stuck with a blown tire or as major as getting an operation, either way it's best to be prepared. Having an emergency fund that is only for emergencies means that you'll always be ready should the worst happen.
It's important to keep a savings account for everyday transactions if you need it. These can have a low balance, but they make sure you always have access to quick cash. They won't incur a lot or potentially any interest, but they are still useful for having a source of a cash injection.
Understand The Cost
Some banks charge to have a savings account, some charge to have an account below a certain dollar value in the account. Ultimately multiple accounts could cost you. It's important to take this into consideration when you open multiple accounts. Note that there are a lot of banks without a minimum requirement, nor any fees, these are usually the best ones to use depending on you and your family's goals.
The 2008 financial collapse showed that banks can fail. Luckily FDIC insures account holders up to $250,000. However, the time it takes for this to be paid out can be extremely long. By having multiple savings accounts across different banks, you lessen the risk of being affected by a bank failing.
Also, if you are a high-income individual or have a lot of money saved, by having multiple savings accounts across multiple banks you'll get the FDIC cover per account.
Things don't have to happen overnight. You don't need to go down to the nearest banks as soon as possible and open a bunch of accounts. Instead, take some time, think about it.